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Net-Zero Asset Owner Alliance

New Net-Zero Assets Alliance signatories push initiative to $3.9 trillion

960 640 Stuart O'Brien

AXA, Aviva, CNP Assurances and Fonds de Réserve pour les Retraites (FRR) have joined the UN-convened Net-Zero Asset Owner Alliance, raising total assets under management targeting carbon neutrality by 2050 to more than $3.9 trillion.

The Alliance is a group of the world’s largest pension funds and insurers committing to fully decarbonise their portfolios to avoid a global temperature increase above 1.5°C. Launched in September at the Climate Action Summit, it was initiated by Allianz, Caisse des Dépôts (CDC), La Caisse de dépôt et placement du Québec (CDPQ), Folksam Group, PensionDanmark, and Swiss Re, who were joined by Alecta, AMF, CalPERS, Nordea Life and Pension, Storebrand and Zurich as founding members.

Eric Usher, Head of the UNEP Finance Initiative (UNEP FI), said: “The addition of four significant asset owners signals growing commitment by investors to align their portfolios with the ambitious 1.5°C target that goes beyond even the level of ambition reflected in the Paris Agreement. Concerted investor action led by the Alliance signals to financial markets that making entire portfolios net zero carbon is now clearly on the agenda.”

Now 16-strong, the Alliance actively encourages additional investors to join by committing to a net-zero portfolio by 2050 in support of a global economy that delivers emissions reductions in line with scientifically determined targets.

This is see as critical in light of recent evidence from UN Environment Programme’s Emissions Gap Report, which found collective ambition must increase more than fivefold over current levels to deliver the cuts needed over the next decade to achieve the 1.5°C goal. The Intergovernmental Panel on Climate Change (IPCC) has warned that going beyond 1.5°C will increase the frequency and intensity of climate impacts, such as the heatwaves and storms witnessed across the globe in the last few years. In the report, UNEP said the world must deliver deep cuts to emissions – over 7 per cent each year for the next decade.

The Alliance will also use its powerful voice to engage with governments and ask them to urgently increase their Nationally Determined Contributions ambitions. According to the Emissions Gap report, G20 nations collectively account for 78 per cent of all emissions, but seven of them do not yet have policies in place to achieve their current NDCs, let alone strategies for transformative climate commitments at the breadth and scale necessary.

Convener of Mission 2020 Christiana Figueres, former Executive Secretary of the UN Framework Convention on Climate Change (UNFCC), said: “Reaching net zero emissions by 2050 is a global imperative made clear by science, with huge benefits for all of society.

“We are all better off when finance is flowing towards a liveable future, and today’s announcement makes clear that investors are committed to that pathway. That the world’s asset owners are collaborating unequivocally to limit warming to 1.5°C should be a real boost for all governments preparing to step up their own commitments under Paris in 2020,” she added.

PRI CEO Fiona Reynolds said: “Asset Owners have a key role to play in driving much needed ambition to address the climate emergency. In joining the Alliance, the new members stand alongside founding asset owners in committing to achieve carbon neutral portfolios by 2050. We hope that the leadership shown by members of the Alliance will compel other investors to act urgently to align their portfolios with a 1.5°C scenario and to play their role in meeting the Paris Agreement.”

By joining the Alliance, members hold themselves accountable on progress by setting and publicly reporting on intermediate targets in line with the Paris Agreement. The Alliance has already begun the process of establishing a work plan for 2020.

The Alliance says members will ramp up engagement with the companies in which they are invested, working together with initiatives such as the UN Global Compact Business Ambition for 1.5°C, the Investor Agenda, the Science Based Targets initiative and Climate Action 100+.

Convened by UNEP’s Finance Initiative and the Principles for Responsible Investment (PRI), the Alliance is supported by WWF and is part of the Mission 2020 campaign, an initiative led by Figueres, former Executive Secretary of the United Nations Framework Convention on Climate Change (UNFCCC).